The advancements in digital twins when combined with the use of the machine learning tools can facilitate the effective health assessment and diagnostics of safety critical systems. This study aims at developing a framework to address the health assessment of marine engines utilising digital twins based on first-principles. This framework follows four distinct stages, with the former two including the marine engine digital-twin set up by customising the required thermodynamic models, as well as its calibration using tests trials data representing the engine healthy conditions. In the third stage, measurements from actual operating conditions are corrected and subsequently employed to develop the digital twin representing the prevailing conditions. The fourth stage deals with the engine health assessment by assessing health metrics derived from the developed digital twins. This framework is demonstrated in a case study of a large marine four-stroke nine-cylinder propulsion engine. The results demonstrate that three cylinders are identified to be underperforming leading to an average increase of the engine Brake Specific Fuel Consumption (BSFC) by 2.1%, whereas an average decreases of 6.8% in Indicated Mean Effective Pressure (IMEP) and 6.1% in the Exhaust Gas Temperature (EGT) are exhibited for the underperforming cylinders across the entire operating envelope. The developed digital twins facilitate the effective mapping of the engine performance for the entire operating envelope under several health conditions, providing enhanced insights for the current engine health status. The advantages of the proposed framework include the use of easily obtained data, and its application to several engine types including two and four-stroke engines for both propulsion and auxiliary use.